Lowering the cost of finance could lead to dramatic reductions in the levelised cost of energy (LCOE) of solar, according to LONGi Solar.

Speaking to PV Tech, VP of overseas marketing at LONGi, Max Xia said the entire value chain had work to do to trim down the LCOE but the most substantial gains could be achieved by slashing interest rates.

“The final important piece of the puzzle is reducing the cost of finance,” said Xia. “We need support from development banks. If we could drive down interest rates from 8% to 1% or 2% we believe the LCOE could fall by as much as 50%. The Chinese government is looking to do more work on reducing the financial costs of LCOE as well as grid costs and land costs.”

“Together, all these elements, from polysilicon to system performance and finance, can drive down the LCOE. We think if we reduce the LCOE by 10-20%, the global industry would double in size. We’ll see 20-30GW markets annually in each of Africa, India and the Middle East,” he predicted. “Grid parity in China is now less than two years away, perhaps one year. To get there globally, we need the entire value chain to perform.”

Technology gains

LONGi has its own preferred route for achieving these gains based on its advocacy of monocrystaline PERC technology. Xia ran through the improvements the industry has in its reach to drop LCOE beyond the tipping point for widespread grid parity.

“Polysilicon supply in China needs to improve its quality. This will take some time particularly for higher quality N-type. Secondly, we need larger scale mass production to reduce the price of polysilicon. From the ingot and wafer side, we need the capacity to increase and costs to fall again but this is happening as we see more and more people turning to diamond wire. On cells and modules, mono PERC, and black silicon for multi will help improve efficiency and lower costs further.

“At a system level, bifacial, glass-glass with trackers will put costs up but increase the project lifespan and the yield. There is good potential for this technology in distributed generation projects as well. Power China has some expertise and is also looking at ways to improve system performance and O&M.

“Together, all these elements, from polysilicon to system performance and finance, can drive down the LCOE,” said Xia.